“You’ve got to spend money to make money.” It’s a phrase that’s made millions of businesspeople rich. It’s also a motto that’s had millions of others moving back in with their parents, or possibly into refrigerator boxes.
Major League Baseball’s economic model demands a similar mentality. The rich can throw money at the young talent bubbling up from the farm systems of the poorer teams. Those poorer teams continue to do the heavier lifting of scouting, drafting well, and maintaining partnerships with effective minor-league affiliates.
The difference between a successful business and a liquidation sale is an understanding that smart spending is more important than heavy spending. Toward that end, Athlon Sports has built a formula to measure not just how much a team spends, but how much return they get on their investment. We’ll call it the Financial Responsibility Index. Here, in a nutshell, is how it works.
Teams are ranked over a 10-year period (in this case, 2001 through 2010) in terms of both total wins and total payroll spending. The payroll is based on Associated Press opening-day figures for each season. Total spending is then divided by wins to get the average amount each team spends to win a game.
Postseason Success is factored in, as well:
(0.1 x playoff trips) + (0.5 x World Series titles) = PS
From there, the formula looks like this:
(Average per win/$1,000,000) x Wins Rank – (PS)
The lower the index, the better a team is spending its money. Think of it as how much a team spends to get one dollar's worth of production. Therefore, a 1.00 FRI should be treated as average.
Teams winning games on shoestring budgets get more credit here than ones that lose cheaply. The worst thing a team can do, however, is lose expensively, as the lower-ranked teams here prove.
Here’s how the Index ranks the 30 MLB teams:
30. New York Mets, 7.99 FRI
--#17 in wins, #3 in payroll, $1,416,212/win, 1 playoff trip
As said before, losing expensively is the worst thing a baseball team can do. When it comes to bad spending, the Flushing Meadows boys flush money like no one else. The Mets never ranked lower than sixth in payroll over the past decade, as they’ve simply been unable to compete wisely in free agency. 40-year-old Moises Alou, the remains of Tom Glavine, and the great unknown that was Kaz Matsui are all blunders that the team has finally managed to get out from under. Now, if they can just escape Carlos Beltran and Jason Bay.
29. Chicago Cubs, 3.10 FRI
--#13 in wins, #5 in payroll, $1,214,489/win, 3 playoff trips
On the North Side of Chicago, player costs have ballooned since the back-to-back division titles in 2007-08. The Cubs paid through the nose for the likes of Aramis Ramirez, Alfonso Soriano and Derrek Lee, not to mention the enormous contract given to Carlos Zambrano. In return for those investments: inconsistent production and the occasional demolished Gatorade cooler.
28. Los Angeles Dodgers, 2.53 FRI
--#9 in wins, #4 in payroll, $1,169,769/win, 4 playoff trips
The Dodgers join the Mets as two of only four teams to have spent a billion dollars in payroll during the past 10 years. No points for guessing who the other two are. They’ve gotten eight winning seasons for their efforts, but back-to-back five-game NLCS losses are as good as it’s gotten in the postseason. The 2009 youth movement, jettisoning Jeff Kent, Derek Lowe, and Andruw Jones, added 11 wins to the ledger but still couldn’t get the team to a World Series.
27. Detroit Tigers, 2.16 FRI
--#25 in wins, #13 in payroll, $1,125,619/win, 1 playoff trip
The Tigers were actually on the cheap until they ponied up for Magglio Ordonez and Kenny Rogers in back-to-back years. Since then, keeping the homegrown talent has gotten expensive, as did the "good news, bad news" trade with Florida that brought in Miguel Cabrera and Dontrelle Willis.
26. Seattle Mariners, 2.12 FRI
--#15 in wins, #8 in payroll, $1,139,640/win, 1 playoff trip
The Mariners dominated early in the decade, including the 116-win year in 2001. They haven’t seen the playoffs since, but they’ve still spent heavily, ranking outside the top 10 in payroll only once. Ichiro, of course, gets more expensive every year, but players like Bret Boone, Jamie Moyer and Richie Sexson also collected increasing salaries for wildly fluctuating production.
25. Baltimore Orioles, 1.81 FRI
--#28 in wins, #16 in payroll, $1,035,698/win, zero playoff appearances
The Orioles have tried to make some free-agent noise, but gambled on players who were past their prime (Javy Lopez), may have had other “performance” issues (Miguel Tejada), or just were never very good to begin with (Sidney Ponson).
24. Texas Rangers, 1.17 FRI
--#19 in wins, #15 in payroll, $925,268/win, 1 playoff trip
Early in the decade, the Rangers tried to slug opponents into submission, but the only people really afraid were the team’s accountants. Juan Gonzalez, Rafael Palmeiro, Pudge Rodriguez and, of course, Alex (I Got Paid More Than the Minnesota Twins) Rodriguez had the Texas payroll in Yankees-Red Sox-Mets territory. Once A-Rod left, the payroll deflated faster than Denise Richards’ chest. Also once A-Rod left, the team had a winning season. Go figure.
23. Arizona Diamondbacks, 1.02 FRI
--#20 in wins, #17 in payroll, $904,627/win, 3 playoff trips, 1 World Series win
If these rankings are done again next season, the D-Backs will take a huge hit in the postseason success figures. After playoff trips in 2001 and 2002, Arizona saw the writing on the wall when Curt Schilling and Randy Johnson began breaking down, and a payroll that was north of $100 million in 2002 was down to $70 million by the time the bottom fell out in ’04. Since then, the Snakes have been operating on the relative cheap, even after winning a surprising division title in 2007 and re-signing the Big Unit soon after.
22. Kansas City Royals, 0.91 FRI
--#30 in wins, #26 in payroll, $791,148/win, zero playoff appearances
The Royals are fully aware of their place on the food chain. Their few excursions into free agency have been frightening. First came the inexplicable $53 million deal with Gil Meche, then $36 million to Jose Guillen. Much like sticking one’s hand on a lit stove burner, the Royals appear to have learned their lesson.
21. Colorado Rockies, 0.89 FRI
--#22 in wins, #20 in payroll, $819,764/win, 2 playoff trips
It seems odd to suggest that the Rockies, the team that went absolutely mental on signing pitchers like Denny Neagle and Mike Hampton, have gotten their money's worth. Larry Walker, though, never really saw his production dip in Denver, and the Rockies also got good production out of young players like Todd Helton and Juan Pierre, leading them to enough wins to at least offset the goofy pitching deals.